Beaglee Inc. FY2025 Q3 Earnings Report

Financial Highlights

• Net Sales: ¥12.69B
• Operating Income: ¥1.00B
• Net Income: ¥724M
• EPS: ¥87.16

Income Statement

Balance Sheet

Profitability Ratios

Year-over-Year Comparison

Share Information

Dividend Information

Full Year Forecast

Disclaimer

This data was automatically extracted from XBRL files. Please refer to the original disclosure documents for accuracy.

AI Financial Analysis

Executive Summary

Beaglee (3981) reported FY2025 Q3 consolidated results under JGAAP showing a challenging topline and profit environment, with revenue of ¥12.69bn, down 11.0% YoY, and operating income of ¥1.00bn, down 28.9% YoY. Net income declined 32.8% YoY to ¥0.49bn, implying meaningful margin compression and negative operating leverage versus the prior year. Gross profit was ¥4.98bn, translating to a gross margin of 39.3%, while operating margin stood at 7.9%, indicating selling and administrative intensity typical of digital content platforms. Ordinary income (¥0.97bn) was slightly below operating income due to financing costs (interest expense of ¥36.9m), yielding an interest coverage of 27.1x and suggesting manageable financial burden. DuPont decomposition indicates ROE of 6.18%, driven by a net margin of 3.83%, asset turnover of 0.789x, and financial leverage of 2.04x; the implied ROA is about 3.0% (3.83% × 0.789). The balance sheet shows total assets of ¥16.08bn and total equity of ¥7.86bn, implying a calculated equity ratio of roughly 48.9% (despite a reported 0.0% that appears to be an undisclosed XBRL item), and a liabilities-to-equity ratio of 1.25x. Liquidity is thin but positive with a current ratio of 106.9% and quick ratio of 106.1%, supported by minimal inventories (¥63.6m), consistent with a digital model. Working capital is positive at ¥0.56bn, but the cushion is not large relative to current liabilities of ¥8.02bn. Cash flow statement items are undisclosed (all zeros), limiting analysis of earnings-to-cash conversion, free cash flow, and capital intensity; likewise, depreciation and amortization are undisclosed, constraining EBITDA comparability (reported as 0 by data vendor due to lack of disclosure). The effective tax rate shown as 0.0% is clearly non-representative; using ordinary income suggests a high apparent tax burden, but there are likely classification/deferred effects given net income exceeds ordinary income minus the disclosed tax line. Dividend per share is undisclosed (shown as 0), and payout ratio is reported as 0.0%, suggesting either no dividend or not disclosed for the period. Overall, the profile indicates a profitable but decelerating business with moderate leverage and adequate short-term liquidity, pressured by revenue contraction and operating deleverage. The key watchpoints are revenue stabilization in the core digital content business, operating cost discipline (especially content procurement and marketing), and visibility on operating cash flow once disclosed. Data limitations around cash flows, D&A, and share metrics necessitate caution in interpreting cash conversion, capital intensity, and per-share valuation metrics.

Profitability Analysis

ROE_decomposition:

• net_profit_margin: 3.83%
• asset_turnover: 0.789x
• financial_leverage: 2.04x
• calculated_ROE: 6.18%
• implied_ROA: 3.02% margin_quality: Gross margin at 39.3% reflects a relatively healthy take-rate for a digital content platform, albeit with YoY margin pressure implied by the decline in operating income versus revenue., Operating margin of 7.9% (¥1,003m on ¥12,688m revenue) indicates substantial operating costs (selling, content fees, platform and marketing) of roughly 31.4% of sales relative to gross profit., Ordinary margin of 7.6% is close to operating margin, indicating limited non-operating drag; interest expense of ¥36.9m is modest., Net margin at 3.83% is compressed versus operating margin, reflecting tax and other below-the-line effects; tax disclosures appear inconsistent (reported effective tax 0.0% likely not representative). operating_leverage: Revenue declined 11.0% YoY, while operating income fell 28.9% YoY, evidencing negative operating leverage., The sensitivity of profits to revenue indicates a relatively high fixed-cost component (content minimum guarantees, platform, personnel, marketing commitments)., Maintaining or reducing fixed costs will be key to stabilizing OPM if revenue pressure persists.

Growth Assessment

revenue_sustainability: Topline contracted 11.0% YoY to ¥12.69bn, suggesting softer user demand, competition, or pricing/contents mix pressure in digital comics/e-book services., Inventories are negligible (¥63.6m), implying revenue is largely service-based; sustainability depends on user acquisition/retention and content availability. profit_quality: Operating income declined faster than revenue (-28.9% vs -11.0%), indicating mix deterioration and/or elevated operating cost intensity., Ordinary income (¥968m) closely tracks operating income, supporting the view that core operations drive earnings; financing activities are not a major swing factor. outlook: Absent disclosure of cash flows and D&A, visibility on cost flexibility and capital needs is limited., Recovery hinges on stabilizing MAU/ARPU and optimizing marketing ROI; watch for commentary on content procurement terms and platform fees in subsequent disclosures., In the near term, margin recovery may be challenging without a rebound in sales or cost realignment.

Financial Health

liquidity: Current ratio: 106.9%; Quick ratio: 106.1% — indicates tight but positive liquidity coverage., Working capital: ¥556.9m (¥8,579.9m CA – ¥8,023.0m CL)., Cash and equivalents are undisclosed (reported as 0), limiting visibility on immediate cash buffer. solvency: Total liabilities: ¥9,808.0m; Total equity: ¥7,864.0m; Debt-to-equity (liabilities/equity): 1.25x., Calculated equity ratio (equity/total assets) is ~48.9% (despite a reported 0.0% due to non-disclosure), suggesting a moderately leveraged balance sheet., Interest coverage of 27.1x indicates ample capacity to service interest under current earnings. capital_structure: Financial leverage at 2.04x (assets/equity) aligns with the balance sheet position., Limited information on interest-bearing debt composition and maturities due to disclosure gaps; monitor upcoming notes for debt mix and rate sensitivity.

Cash Flow Quality

earnings_quality: Operating cash flow is undisclosed (reported as 0), making OCF/Net Income of 0.00 a data artifact rather than a true measure., Depreciation and amortization are undisclosed, preventing EBITDA and cash earnings reconciliation., Given the digital model, D&A (notably for intangibles) can be material under JGAAP; absence of this data limits assessment of non-cash components. FCF_analysis: Free cash flow is undisclosed (reported as 0), so coverage of investment needs cannot be evaluated., Capex/investment outflows are not available; monitoring future CF statements is necessary to judge sustainability. working_capital: Inventories are minimal at ¥63.6m, implying low inventory risk., Receivables and payables detail is not provided; however, the positive but modest working capital suggests some sensitivity to collection/payables timing., With current liabilities at ¥8.02bn, maintaining cash collections and efficient billing cycles is critical.

Dividend Sustainability

payout_ratio_assessment: Annual DPS is undisclosed (shown as 0.00); payout ratio likewise shows 0.0% and should not be interpreted as a true zero., Given net income of ¥486m and limited visibility on cash flows, assessing capacity for distributions requires future disclosure. FCF_coverage: FCF is undisclosed; therefore, coverage of dividends (if any) cannot be assessed., Prioritization of liquidity may be prudent given tight current ratios and revenue pressure, but policy details are not provided. policy_outlook: No explicit dividend policy information is available in the provided data., Watch management commentary for shareholder return policy, especially in the context of growth investments and cash generation.

Risk Assessment

Business Risks:

• Competitive intensity in digital comics/e-book platforms, impacting user growth and pricing power.
• Content procurement costs and terms (minimum guarantees, exclusivity), which can pressure gross margin.
• Platform dependency and fee structures with app stores/payment gateways affecting take-rate.
• User acquisition cost inflation and volatility in advertising efficiency.
• Regulatory or IP enforcement risks affecting content availability and monetization.
• Potential saturation or seasonality in core user segments.

Financial Risks:

• Tight liquidity buffer (current ratio ~1.07x) increases sensitivity to working capital swings.
• Moderate leverage (liabilities/equity 1.25x) exposes earnings to changes in financing costs if rates rise or refinancing is needed.
• Limited visibility due to undisclosed cash flows and D&A complicates assessment of cash conversion and investment needs.
• Potential exposure to intangible asset amortization or impairment under JGAAP, which could affect earnings.

Key Concerns:

• Revenue contraction of 11.0% YoY and disproportionate decline in operating income (-28.9%).
• Insufficient disclosure of cash flow and D&A, hindering evaluation of earnings quality and FCF.
• Thin but positive liquidity with modest working capital relative to current liabilities.

Investment Implications

Key Takeaways:

• ROE at 6.18% driven by modest margins and moderate leverage; ROA ~3.0%.
• Gross margin of 39.3% remains healthy, but operating deleverage is evident as OPM is 7.9% with YoY pressure.
• Balance sheet is moderately leveraged with a calculated equity ratio ~48.9% and strong interest coverage (27.1x).
• Liquidity is adequate but tight (current ratio ~1.07x); cash position not disclosed.
• Cash flow, D&A, and dividend details are missing, limiting assessment of cash conversion and capital intensity.

Metrics to Watch:

• Topline trends (YoY revenue growth, MAU/ARPU if disclosed).
• Operating margin trajectory and marketing-to-sales ratio.
• Gross margin stability (content cost and platform fee impacts).
• Operating cash flow and OCF/NI once disclosed; FCF generation.
• Working capital efficiency (DSO/DPO) and cash balance.
• Leverage metrics (net debt/EBITDA if available) and interest coverage.

Relative Positioning: Within the domestic digital content/platform cohort, Beaglee exhibits solid gross margins and manageable financial leverage but currently lags on growth momentum and operating leverage, with tighter near-term liquidity versus stronger cash-generating peers; improved disclosure on cash flows will be important for clearer benchmarking.

Disclaimer

This analysis was auto-generated by AI. Please note the following:

• No Guarantee of Accuracy: The accuracy and completeness of this analysis are not guaranteed. For accurate financial data, please refer to the original disclosure documents published on TDnet or other official sources
• Not Investment Advice: This analysis is for general informational purposes only and does not constitute investment advice under applicable securities laws. It is not a recommendation to buy or sell any specific securities
• At Your Own Risk: Investment decisions should be made at your own discretion and risk. We assume no liability for any losses incurred based on this analysis